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Unformatted text preview: Exam 1 BA642 Quality and Operations Management Essay One, Exam 1 December 15, 2010 Inventory analysis ABC Analysis divides inventory into three classes based on annual dollar volume. These are class A, B and C. Class A is for high annual dollar volume, Class B is for medium annual dollar volume and Class C is for low annual dollar volume. These classes are used to establish policies that focus on the few critical parts and not the many trivial ones. Usually, the A segments represent approximately 80% of the total spend within a category, the B segments represent the following 15% of the total spend within a category and the C segments are the remaining (most of the time several segments) which represents the final 5% of the total spend (© EIPM 2004 – Toolbox – ABC Analysis 1) I am going to provide a practical solution for a problem presented in this document. First, we need to comply with the above explanation and identify the given parameters. We are given in a beauty-products retail store that there are 10 inventory items as indicated in the table...
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- Spring '11
- class a, annual dollar volume